Boeing stock drops as 737 Max production is suspended
Production of the troubled model will be halted from January
officials have decided to temporarily halt the production of the troubled 737 Max, which was due to start in January 2020, a Boeing press release says.
The announcement cites the extension of certification by the regulatory authorities into 2020 as the main reason behind the decision, which was made during the annual board meeting in Chicago.
According to Boeing, the company produced over 400 planes throughout the grounding. However, due to the uncertainty about the timing and conditions of return to service the manufacturer decided to prioritise delivery of the previously produced planes to the customers instead of making the new ones.
Additional information on the suspension was not yet revealed. However, Boeing plans to issue additional comments on the matter in connection with its fourth-quarter report.
Following the news, the company's stock lost 4.29 per cent throughout the day, with shares trading at $327 (€293, £247) by the time the US markets closed.
737 Max was grounded after being involved in two major crashes, in October 2018 and March 2019 ,that killed 346 people. Both fatal accidents were blamed on faults on flight deck equipment in the new airliner.
Initially, 737 Max's production was cut to 42 planes per month, which led to multiple charges. The decision was followed by multibillion charges. The company unveiled that its profits had nosedived by more than a half, as Boeing paid around $5.6bn (£4.2bn, €5bn) in customer compensations.
The new twist in the grounding of 737 Max is likely to bring another set of heavy charges, as airlines across the world are still waiting for their planes to be produced or delivered.
FURTHER READING: Boeing profits nosedive by more than half on 737 Max crisis